Standing Committee H

[Mr. Roger Gale in the Chair]

Higher Education Bill

Roger Gale: Before we commence, I have a couple of housekeeping announcements to make.
 Hon. Members will notice that there is a rope across the Room. I am sorry that it is not bullet-proof glass, but it is the best that we can do at short notice. As I said at the Committee's first sitting, it is my intention to allow members of the public to occupy the seats beyond the rope if the Public Gallery becomes full. That being so, hon. Members bar one will already have worked out that until the rope becomes unnecessary, the centre Door will be for use by Members only. It will not be locked during Divisions because we have only two Badge Messengers to man the entrances. The Chairmen—Mr. Hood and me—will therefore deem the centre Door to be locked at any time that we choose to do so, and thereafter, no Member will be allowed to enter through it. 
 One other matter that requires the Committee's attention concerns the debate on clause 22. Members will not be surprised to know that I have read the Hansard report with great care. At the start of our debate on the current group of amendments, the hon. Member for Epsom and Ewell (Chris Grayling) said that he expected to have the opportunity to discuss the principles behind clause 22 on a stand part debate. He then went on to discuss the principles of the clause, as did several other hon. Members. Having read Hansard at length, I have concluded that most of the matters arising from the clause, save those that are about to be discussed, have already been debated. I propose therefore not to permit a stand part debate on clause 22. I give hon. Members warning of that now in case there are other matters on which they seek to prevail on the Chairman's leniency to raise. That does not mean that they may cover matters that have already been discussed.

Clause 22 - Power of Secretary of State to impose condition as to student fees, etc.

Amendment proposed [12 February]: No. 258, in 
clause 22, page 8, line 41, leave out 'or'.—[Mr. Boswell.] 
 Question again proposed, That the amendment be made.

Roger Gale: I remind the Committee that with this we are discussing the following amendments: No. 259, in
clause 22, page 8, line 42, at end insert 
 'or
 (c) any other higher education funding body designated by the Secretary of State.'. 
No. 245, in 
clause 22, page 9, line 2, leave out from '(1)' to end of line 3. 
No. 246, in 
clause 22, page 9, line 3, at end insert 
 'but does not include a College of Further Education'.

Tim Collins: I merely record the Opposition's hope that you, Mr. Gale, and all Committee members have had a splendid break, and say that, as we are keen to make progress this morning, I look forward to the Minister's response to the points made in our last sitting.

Alan Johnson: That was the debate on amendments Nos. 258, 259 and 245? The Committee will see that I had a splendid break.

Roger Gale: Order. The debate is in fact on amendments Nos. 258, 259, 245 and 246.

Alan Johnson: Thank you, Mr. Gale. I add my sentiments to those expressed by the hon. Member for Westmorland and Lonsdale (Mr. Collins).
 I shall deal first with amendments Nos. 258 and 259, which are well intentioned. They would introduce an additional provision in clause 22(2) to cover 
''any other higher education funding body designated by the Secretary of State''. 
That is unnecessary. There are only two funding bodies in England—the Teacher Training Agency and the Higher Education Funding Council—and although there is a funding body for Wales, it is covered by clause 25. The creation of a new funding body, for example through a merger, would require primary legislation, so the amendments are unnecessary. 
 On a technical matter, because there is no amendment to clause 22(1), which refers to the Further and Higher Education Act 1992 and the Education Act 1994, the amendments are irrelevant because only those two funding bodies are mentioned in those Acts.

Chris Grayling: In the last sitting before the break, we debated the potential for penalties to be levied through the research funding stream as well as the teaching funding stream. Will the Minister clarify the situation surrounding the Government's intention to provide research funding through regional development agencies? In theory at least, if universities receive such funding, the measures in the clause could be applied to that funding.

Alan Johnson: That simply goes back to the point that I made during the previous sitting. If the funding provided through regional development agencies is HEFCE funding—quality related money for research—it is subject to the conditions under the clause. If the funding comes from the research councils, it is not. There is a clear division. In fact, if we follow the proposals in the Lambert report, funding from RDAs is more likely to come from QR money than research council money.
 The second pair of amendments relates to the phrase 
''an institution of a class'' 
and would exclude further education colleges from the definition of a ''relevant institution''. The reason for including the phrase ''institution of a class'' is so that the Secretary of State, in the grant letter to HEFCE, does not have to list every individual university. We have published the proposed grant letter to be used in three years' time, which contains an example of an institution of a class because paragraph 3 refers to ''every relevant institution''. A relevant institution is a class. For example, Birkbeck would not be in that class because it is not a relevant institution—all of its courses are part-time. The Open university might be in the same position, but there may be complexities in that case. That is what we mean by a class of institution. An institution may belong to one class or another according to whether it has an access plan, because a different set of conditions will apply. It is simply a measure to avoid the Secretary of State having to list onerously every individual institution, and I hope that hon. Members will accept that there is nothing more to that. Every class would have to be defined by objective criteria so the phrasing is not as open-ended as hon. Members might have initially thought. 
 I counsel the Committee to reject the amendment on further education colleges, because it would completely deregulate fees. We are dealing with the power of the Secretary of State to apply conditions. If the Secretary of State cannot apply conditions in FE colleges, those undertaking higher education courses could charge whatever they like. The amendment would have that unintended consequence. However, I believe that it is a probing amendment, which allows me to clarify the situation in FE colleges. For those that have higher education courses franchised to them from a university, the onus for access plans and so on falls on the university not the FE college. For those FE college courses funded directly from HEFCE, which is a minority, the onus is on the FE college to ensure that their access plans are in place.

Tim Boswell: I am following the Minister's argument with care, interest and sympathy. I think that he is saying that, notwithstanding the fact that the institution may be a further education college governed by a further education corporation, if it has, or is in receipt of, public funds from a higher education funding council directly, HEFCE, as it would usually be—or the TTA in theory—could impose such a condition of grant. In other words, it does not confine itself only to institutions that are described as higher education institutions in the 1992 Act.

Alan Johnson: Given that 27 per cent. of those studying in further education colleges come from the 15 per cent. most disadvantaged wards in the country, there is hardly a problem with access and widening participation in FE colleges. However, the hon. Gentleman is right. Where the funding comes direct
 from HEFCE, we cannot allow there to be a loophole whereby the college can charge whatever it likes and not be subject to the office for fair access. Where the college is franchised out from a higher education institution or university, which is the usual situation, the onus will be on the university.

Tim Boswell: In cases in which there is direct funding from HEFCE or another body, is it incumbent on a further education corporation that offers a degree of higher education activity to produce a full-blown access plan? If so, is that an onerous task or can it be scaled down for an FE corporation?

Alan Johnson: The college has to provide an access plan, but I do not imagine that that would be an onerous task. In almost all cases, it would simply state what it was doing already. The letter on the draft guidance from the Secretary of State to OFFA states quite explicitly that where there is a very good mix of social classes, OFFA's main aim is to ensure that if there is a £3,000 course, the extra £300 is provided so that the student support package is £3,000 rather than £2,700. That is the main issue. I do not think that it would be onerous to deal with other issues. I certainly have not heard many FE colleges suggesting that that would be the case, but the hon. Gentleman is right. If an FE college is funded directly by HEFCE, the onus is on the college to provide the plan.

Phil Willis: May I take the Minister back to amendment No. 259? With regard to the comments that he has rightly made about the FE sector and its widening participation agenda, particularly in relation to the higher education qualifications or courses that it already delivers, has the Secretary of State already ruled out totally the principle that the Learning and Skills Council could directly fund foundation degrees in particular within the FE sector without having to go to a higher education institution to get its permission to deliver that in the sector? Would not the amendment preclude that as an option?

Alan Johnson: The answer is no and no. No, my right hon. Friend the Secretary of State has not ruled out the Learning and Skills Council. There is a concern. If we are rubbing out the lines at 16, and increasingly for the 14 to 19 age group under Tomlinson, and we are rubbing out the lines to a certain extent at 18, the confusion between LEAs, the LSC and HEFCE must be resolved. In dealing with amendment No. 259, I mentioned a merger. There could be a merger between the LSC and HEFCE to a degree, or the LSC may become another funding body. Either way, that would require fresh primary legislation, so the amendment is unnecessary. To produce the situation that I have described, we would need primary legislation.

Tim Collins: For the avoidance of doubt, will the Minister confirm that he is talking hypothetically and that he is not saying that there are plans for a merger of funding organisations or that that is contemplated?

Alan Johnson: No, I am not saying that. The answer to the question about whether the Secretary of State has completely ruled out a merger is no, but that is not to say that there are active plans for a merger. Given the Tomlinson agenda and everything that is going on, it would be crazy to rule anything out when we are trying to make the system more coherent. We want there to be less bureaucracy for sixth form colleges and tertiary colleges, given that three funding bodies deal with the 14 to 19 age group. I am making that simple point.

Tim Boswell: The Minister is genuinely trying to assist the Committee and has clearly benefited from his break. Will he also deal with the point that I raised in my closing remarks about publicly funded students in private institutions, such as the university of Buckingham, or a private specialist college? Will such students or their institutions be affected by the clause?

Alan Johnson: I am glad that the hon. Gentleman raised that point, because although I cannot say that I spent the whole break thinking about that issue, I did give it some thought and went back to the drawing board. I am confident that there is no problem. There is only one private university, which is Buckingham, but many institutions have private courses.

James Clappison: The Government's policies will result in more.

Alan Johnson: The hon. Gentleman says from a sedentary position that there could be more, a point raised by the hon. Member for Daventry (Mr. Boswell). If there are designated courses at other private institutions, for which the state provides money, could a university set up a private institution to get round the legislation and allow unregulated fees? That is the problem raised by the hon. Gentleman.

Tim Boswell: The Minister has understood part of the problem. Equally, if a private institution in which students happened to receive support for their funding continued on that basis, and there was no malicious or clever intent to evade the legislation, would it be entrapped in the whole paraphernalia of access plans, notwithstanding the fact that it was a private institution and not receiving money directly from the funding council, but only indirectly for its students?

Alan Johnson: That is much simpler. The answer is no. I have always taken the line of not saying more than necessary, but having started on this theme, I will add that I am confident that if a university tried to set up a separate institution to get round the legislation, it would know that it would be left bereft of HEFCE funding, but would it be able to establish a fees-only situation that would be quite generous? It is almost incomprehensible that any university would try to do that, given that it would not only not receive HEFCE funding or research funding from HEFCE, but would probably get no student support, because designation is entirely a matter for the Secretary of State. If designation looked like being an issue, the Secretary of State could simply stop it by refusing to designate those courses.
 Having answered a question that I was not asked, I hope that I have answered the questions that I was asked and that the hon. Member for Daventry will withdraw the amendment.

Tim Boswell: It is deeply flattering and entirely undeserved that the Committee has been poised for a whole week on my amendment, but there it is. I find myself in the position of the Spanish academic who was locked up by the inquisition for five years, returned to his duties at Salamanca university and began his inaugural lecture with the phrase ''As I was saying yesterday''. However, I need not repeat my point. The Minister has characteristically tried to respond to the points and has given us some very useful clarification.
 The principle of amendment No. 259 is that it would add to the number of funding bodies that might impose such conditions. Although I was genuinely trying to help the Minister, if only by smoking out what was intended, I do not think that we need an extra body. As he said, if we did, we could legislate for it as part of the primary legislation. Therefore, applying—as mediaeval logic has now come back into fashion—the provisions of Occam's razor, that it is no longer necessary to multiply bodies beyond the need for them, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 22 ordered to stand part of the Bill.

Roger Gale: I should have said at the start of the proceedings that the hon. Member for Epsom and Ewell indicated to me most courteously that he might have to leave the Committee at some point during the morning for reasons that I know we all understand. If he does so, he will take the Committee's good wishes with him to his wife.
 We now come to clause 23. The Committee has got used to my unsubtle ways by now. As this is a complex issue and the amendments are inter-related, I shall allow a fairly wide-ranging debate on the understanding that there will almost certainly be no stand part debate. However, that is not carte blanche to have another Second Reading debate on the Bill. I expect remarks to be confined to the clause, if only because other important matters arise later in the Bill.

Clause 23 - Condition that may be requried to be imposed by English funding bodies

Anne Campbell: I beg to move amendment No. 82, in
clause 23, page 9, line 7, leave out paragraph (a).

Roger Gale: With this it will be convenient to discuss the following amendments: No. 3, in
clause 23, page 9, line 10, leave out 'the higher amount' and insert 
 '£3,000, increased annually on 1st April, in line with the Retail Price Index'.
No. 144, in 
clause 23, page 9, line 11, at end insert 
 'but which can increase by a minimum of 0.5 per cent. above the rate of the retail price index in each academic year.'. 
No. 223, in 
clause 23, page 9, line 11, at end insert 
 'and that at least 10 per cent. of its fee income is supplied for distribution amongst institutions, as directed by the Secretary of State'. 
No. 239, in 
clause 23, page 9, line 11, at end insert 
 'and that there is provision to students, as directed by the Secretary of State, of a bursary equivalent to at least 10 per cent. of the fee, or £300, whichever is the greater sum'. 
No. 83, in 
clause 23, page 9, line 13, leave out from 'period' to 'institution' in line 15. 
No. 84, in 
clause 23, page 9, line 26, leave out paragraph (a). 
No. 85, in 
clause 23, page 10, leave out lines 30 and 31. 
No. 120, in 
clause 23, page 10, line 30, leave out from 'means' to end of line 31 and insert 
 '£3,000, increased annually on 1st April in line with the Retail Price Index'. 
No. 110, in 
clause 23, page 10, line 35, at end insert 
 'but excludes any year of education beyond the first three years of a course in medicine, veterinary medicine or education'. 
No. 86, in 
clause 24, page 10, line 44, leave out 'and the higher amount'. 
No. 87, in 
clause 24, page 10, line 48, leave out 'and the higher amount'. 
No. 88, in 
clause 24, page 11, line 1, leave out 'either of those amounts' and insert 'that amount'. 
No. 89, in 
clause 26, page 11, line 26, leave out paragraph (a). 
No. 225, in 
clause 26, page 11, line 30, at end insert 
 'and that at least 10 per cent. of its fee income is supplied for distribution amongst institutions as directed by the Secretary of State.'. 
No. 240, in 
clause 26, page 11, line 30, at end insert 
 'and that there is provision to students, as directed by the Secretary of State, of a bursary equivalent to at least 10 per cent. of the fee, or £300, whichever is the greater sum'. 
No. 252, in 
clause 26, page 11, line 30, at end insert 
 'but which can increase by a minimum of 0.5 per cent. above the rate of the retail price index in each academic year.'. 
No. 90, in 
clause 26, page 11, line 32, leave out from 'period' to 'institution' in line 34. 
No. 91, in 
clause 26, page 12, leave out lines 33 and 34. 
No. 121, in 
clause 26, page 12, line 33, leave out from 'means' to end of line 34 and insert 
 '£3,000, increased annually on 1st April in line with the Retail Price Index'. 
 No. 92, in 
clause 31, page 14, line 5, leave out subsection (1). 
No. 93, in 
clause 31, page 14, line 10, leave out 'also'. 
No. 94, in 
clause 31, page 14, leave out lines 39 to 43. 
No. 95, in 
clause 35, page 16, line 4, leave out '(a) or'. 
No. 96, in 
clause 36, page 16, line 23, leave out '(a) or'.

Anne Campbell: The purpose of amendment No. 82, and of consequential amendments Nos. 83 to 96, is to remove the variable fee and to replace it with a fixed fee. I have attempted to delete all references to the higher amount, leaving only the basic amount in place. That means that the basic amount will remain the fee that is charged to all eligible students as an entry fee into higher education, and I have left the setting of that fee within the Government's remit. I recognise that universities need better funding and that the basic fee would have to rise beyond its current level of £1,125 a year if universities are to increase the amount of funding that they have for teaching.
 It is probably worth pointing out that the amendment would achieve the objective set out in the early-day motion that I tabled on 1 April 2003. It reads: 
 ''That this House welcomes the extra Government money announced in the White Paper 'The Future of Higher Education'; further welcomes the end of up front tuition fees; supports the reintroduction of grants for students from poorer backgrounds; recognises the improvements outlined for the repayment of debt, but believes that differential fees will deter students from low-income backgrounds from applying to the top academic institutions and to certain courses; and, if extra money is required, urges the Government to implement a measured increase in fees across the board, whilst maintaining the full or partial exemption from fees for students from low income backgrounds.'' 
The early-day motion was signed by 77 hon. Members, including my hon. Friend the Member for Aberavon (Dr. Francis), who is sitting next to me. I hope that its aims will be supported by an equally large number when I press the amendment to a vote.

Kali Mountford: I am grateful to my hon. Friend for giving way so early in her remarks. She will know that I was not one of her supporters.

Roger Gale: Order. The hon. Lady must address the Chair.

Kali Mountford: I am so sorry, Mr. Gale.
 I was not one of those who signed the early-day motion, but I should like to ask my hon. Friend what she makes of the reports of people not studying maths at A-level and degree stage. Is there not a case for examining not only people's ability to pay for their education but their desire to go into education if it is not discounted in some way?

Anne Campbell: As a maths graduate myself, I read the reports this morning with interest. I would be rather alarmed if there was a flood of entrants into maths courses who were not properly qualified. There are good reasons for applying to study mathematics,
 not least that it can increase one's earnings capacity considerably more than many other courses. The fact that a course is cheaper should not necessarily encourage people to study a subject that is acknowledged to be difficult. The answer to the lack of mathematics graduates, which my hon. Friend rightly pointed out, is not cheaper fees but better teaching in schools. Higher salaries for school mathematics teachers would get the right quality of graduates teaching mathematics. It is one of the most interesting and rewarding subjects.
 It is worth spelling out why so many Labour Members are opposed to variable fees and why I expect support for the amendment on Report. If the proposals are accepted as drafted, the choice of university and the courses that students take will increasingly be based on affordability and not on academic ability. Highly priced universities may put people off, and prevent them from reaching their true potential, as they will try to find a cheaper course elsewhere. 
 It would be churlish of me, however, not to say that the Government are offering students from poorer backgrounds student support that is second to none. Maintenance grants and easier debt repayment, especially if it is well publicised, will do much to encourage people from low-income backgrounds to go into higher education. There is a great deal of ignorance among potential students and schoolteachers about the fee structure. I hope that the Government will run a big publicity campaign to emphasise that if the proposals for student support come about, it would be easier for students from low-income backgrounds to go to university.

James Clappison: I am listening carefully to the hon. Lady's important remarks. Has she considered the point that, according to the Government's consultation paper, some students from what I regard as lower-income families—those in receipt of family incomes between £15,970 and £22,000—will make a contribution towards tuition fees for the first time?

Anne Campbell: I thank the hon. Gentleman for his intervention, but it is not the student or the family who would pay but the graduate. That is an important distinction between what would happen under the Government's new proposals for student support and what happens at present.

Graham Allen: My hon. Friend makes a very important point in correcting the hon. Member for Hertsmere (Mr. Clappison). She talked about low-income families, and, as she rightly pointed out, youngsters from those families are put off by the initial charges currently levied before they go to university. Will she underline the other side of the equation, which is that no rich or poor student, or rich or poor parent, will pay fees? The student will pay when they have qualified, after graduation when their income reaches a certain level. At that point, they are no longer either rich or poor; they are a graduate repaying on an income-contingent basis. That is one of the great breakthroughs in the package we are discussing.

Anne Campbell: Yes, of course, my hon. Friend is correct. A consultation exercise that I conducted with Cambridge university students showed that the majority were opposed to the move from up-front fees to fees paid after graduation. At present, if students come from reasonably well-off backgrounds, their parents pay the fees. The difference with the Government's proposals is that students would pay the fees after they graduate. Unexpectedly, that was not terribly popular with many Cambridge students.

James Clappison: It is, of course, the case that the measure is based on students paying after graduation. However, the fees of the students whom the hon. Lady described and whose family income is less than £20,970 are currently remitted in full; they do not pay towards the cost of their education at any stage. Under the Government's proposals, if their family income were above £15,970, they would, for the first time, pay for their tuition after graduation.

Roger Gale: Order. I shall allow the hon. Lady to answer if she wishes to do so, but a greater proximity to the amendments before the Committee would be helpful.

Anne Campbell: I shall continue to talk about variability, rather than student support, as I have made the points that I wished to make.
 I should like to touch generally on the points made by the Government on loan repayment, because that will affect people's perceptions of what they can afford. My right hon. Friend the Minister has carefully spelt out the small amount that graduates would have to pay on a weekly basis, although he has avoided saying for how long it would have to be repaid. I have done some calculations—that was where my mathematics degree was useful. A graduate who attended the most expensive course of £3,000 and earns an average of £18,000—admittedly, quite a low salary—would take 33 years to repay the fee part of the loan. The debt will be written off after 25 years, of course, and we should be grateful for that. However, for a low-paid graduate attending a course charging the basic rate of £1,200, the fee will be repaid in just over 13 years. People will make such calculations when considering which university courses to choose.

Alan Johnson: I accept my hon. Friend's point to a certain degree, but in her opening remarks, she pointed out that she would allow the Government to set the level of fixed fee. If the fixed fee were simply £3,000, would not the same situation apply?

Anne Campbell: The great difference is that students would not then have to make the choice. The difficulty for students applying to universities under the new proposals is that they would be initially making a choice on the basis of the university that suits their aptitudes and abilities, but then making a further decision as to whether they could afford to go on paying the fees of their preferred university for a long time. That is what I, and many of my constituents, find difficult to stomach.

David Chaytor: Will my hon. Friend not also accept that in making such a choice, students will increasingly make a judgment—quite rightly—about the benefits of the degree for which they are applying? That judgment will include the financial benefits of careers that are opened up by particular degrees. That is the context in which we must consider the fairness of the repayment mechanism and the impact of variability.

Anne Campbell: If it were the case that the fee would be set according to students' future earning power, my hon. Friend would have a valid argument. However, that is not backed up by what we have seen so far about the proposed level of fees. The two courses that we have heard about, where there may be no fee at all, are physics at Oxford and mathematics everywhere. Those two courses provide the highest earners in society. It may well be that the more popular courses, such as media studies—after which it may be more difficult to earn a higher salary—would charge the higher fee. In a market system, there is no guarantee that the fee would reflect future earnings, which is one of the problems with the Government's proposals. If there were a graduate tax, for example, graduates would pay back in proportion to their earnings.

Phil Willis: Is it not true that one of the great premises of the proposals is future earning potential? That is a huge break with our view of what higher education has traditionally been about. Does the hon. Lady not agree that if we consider the university degrees taken by the hon. Members in this Room, we will find that it would have been impossible for any of them to predict that they would be earning £56,000—or £200,000 in the case of the Minister? It is nonsense to say that it is possible to predict at 18 what someone's future earnings will be 10 to 15 years later. We do not know where our degrees will take us or where our careers will end up.

Anne Campbell: I am not sure how to answer that. I know that the Liberal Democrats' policy is to make everyone pay for higher education through higher taxation.

Phil Willis: That is nonsense.

Anne Campbell: Those of my constituents who have not been to university would find such a proposal impossible to take.

Phil Willis: Will the hon. Lady give way?

Anne Campbell: No, I will not give way.
Mr. Willis rose—

Roger Gale: Order. The hon. Lady is not giving way.

Anne Campbell: I am sure that the hon. Gentleman will get the opportunity to make the points that he wishes to make.

Phil Willis: The hon. Lady should not tell lies.

Roger Gale: Order. The hon. Gentleman will withdraw that remark.

Phil Willis: It was a terminological inexactitude, which I will correct later.

Roger Gale: Order. That defence no longer cuts any ice, either.

Phil Willis: I withdraw the remark.

Anne Campbell: I thank the hon. Gentleman for his apology.
 I am concerned, not just about poorer students, but about students with family incomes higher than around £31,000 to £32,000. Such families in my constituency, and in many other constituencies in the south-east and in London, do not consider themselves to be wealthy, because of the very high housing costs. In a further amendment, which I hope we will discuss later, we seek to examine possible regional or area weighting of the grant threshold for high-cost housing areas.

Jonathan R Shaw: I hope that my hon. Friend can return to the point of the amendments and, in particular, the intervention made by my right hon. Friend the Minister. If there is a fixed fee, as my hon. Friend advocates, why will that not put families off? If the fixed fee were £3,000, where is the justification in my hon. Friend's argument? Moreover, the Select Committee on Education and Skills heard from the Mixed Economy Group of Colleges, which said that it did not expect to raise fees to the maximum, because it wanted to encourage wider participation.

Anne Campbell: I partly addressed the point that my hon. Friend makes and the point made by the Minister in saying that what I object to about the proposals is the introduction of a market system and the imposition of a further level of choice on a student who may find it difficult to predict—or aspire to—the sort of salary levels that have been mentioned.
 Another problem is the differing levels of university income, which I intend to tackle in a moment.

Hywel Francis: Would my hon. Friend not acknowledge that for a long time there has been a market system for part-time students? I am grateful to her for reminding me that I signed that early-day motion, but a lot has happened since then, particularly with the Government announcements in support of part-time students for the first time. Their situation is regulated and has improved, and I am surprised that she has made no comment about that 42 per cent. of the student population.

Anne Campbell: The fact that a system exists does not prove that it is right. There are many reasons why part-time fees may be variable. For example, there are different lengths of courses and hours of study. I have not addressed part-time courses but I know that they will be dealt with later in our proceedings. My constituency contains Anglia polytechnic university, and 35 to 40 per cent. of its students are part time. They are an important consideration.

David Chaytor: Will my hon. Friend give way?

Anne Campbell: If I may make a little more progress, I will be happy to give way later.
 I was in the middle of making a point about people whose family income is about £32,000 or more, particularly if they come from a part of the country in which housing costs are high. Those students will not benefit from a grant and may try to reduce the length of time that it takes to pay off the debt by going to a cheaper university or course. 
 The problem is that variable fees will strengthen the perception that the elite universities are more expensive. We heard a prime example of that during our last sitting, when the hon. Member for Harrogate and Knaresborough (Mr. Willis) perpetuated the myth that Cambridge university was asking people to produce proof that they could provide large amounts of money before admitting them to a course. I have written to the hon. Gentleman, but I have not yet received a response. I hope that he intends to reply, because it is a damaging perception. The elite universities—certainly Cambridge—are not expensive, because rents are subsidised and generous bursaries are available. That makes Cambridge university cheaper than Anglia polytechnic university, which is contrary to the perception that many people have. 
 I am also concerned that the Bill will change the perception of higher education. It will be seen as a financial investment and a route to a highly paid job rather than something to be done for love of learning. A flat fee has the advantage that it is seen as a passport into higher education, while a variable fee makes the student concentrate more on the marketability of the course that they are about to study. 
 Given the length of time that it will take for someone on a low income to pay off a loan, I am also concerned about the recruitment of public sector workers from the cohort of new graduates. I know that later amendments—[Interruption.]

Roger Gale: Order. A lot of conversation is taking place. The hon. Lady is gently spoken, and the Chairman wishes to hear her.

Anne Campbell: The recruitment of public sector workers from the cohort of new graduates will be more difficult. I know that later amendments deal with that issue, and it was discussed in the original White Paper. I look forward to debating it at a later stage.

Jonathan R Shaw: I did not go to university. I did my public sector social work training in a further education college, and the fee, which my employer was charged, was variable.

Anne Campbell: My hon. Friend makes a valid point, but it does not change my opposition to the variable fee for full-time students.

David Chaytor: I want to pursue the previous point and link it to the question of variability and part-time degrees. Does my hon. Friend not accept that the logic of her argument against variability for full-time undergraduates should have led her to table a similar
 amendment to rule out variability for part-time degrees and all further education courses? Why are variable fees unacceptable for mathematics, law or economics, but not for hairdressing, electronics or surveying?

Anne Campbell: The issue that bothers me is the market system being introduced into higher education in a way that will be damaging for students who are considering what three-year course to take. That is why I object to the Government's variable fees proposals.
 I come now to differential income to universities, a point that was raised earlier. Some of the modern universities may have to charge lower fees to attract students to their courses, and statistics show that those higher education institutions are much better at attracting students from lower income backgrounds. They will therefore have a greater expenditure on bursaries, leaving them with few additional funds for teaching. It worries me that that will widen the gap between the elite and the modern universities. 
 The Association of University Teachers has compiled figures showing projections over a three-year period for the Russell group of universities and a group of modern universities. They assume that there are about 20,000 students in both groups, and that the percentage of courses charging the maximum top-up fee in the Russell group will be about 100 per cent. and in the modern group about 50 per cent. Over a three-year period that would lead to an advantage in income for the Russell group of £60 million more than that for the modern universities, taking into account the differential fee, the bursaries and all the other financial implications. That is a big difference and those of us who recognise that some universities are better than others want the standards to be raised throughout, rather than widening divisions between the top universities and the newer universities that have more difficulty in attracting students.

Patrick Hall: With regard to the proportion of income to an institution from tuition fees and variable fees, does my hon. Friend accept that in the so-called modern universities that do little research or postgraduate work and have few overseas students, variable fees will raise a larger proportion of their budget than in the so-called top universities? That is why the overwhelming majority of modern universities welcome the Government's proposals.

Anne Campbell: Nevertheless, some modern universities do not welcome the Government's proposals and my concern is that if those universities are not able to attract the same fee income as the top universities they will not be able to pay their staff as much and they will not have such good teaching facilities, which will lead to a second-rate tier of universities. That would be damaging for the UK; we have some excellent universities and I do not wish the relative quality of those universities to vary any more.
 There is another worrying issue: that the proposals, which will do much to increase university funding, will not come anywhere near to closing the gap completely. That will lead to pressure to raise the cap, and 
 although my right hon. Friend the Minister has tabled an amendment to prevent that from happening before 2010, it worries me, and many of my hon. Friends, considerably. The National Association of Teachers in Further and Higher Education has estimated that the top-up fee income will cover only 12 per cent. of the estimated shortfall. If my right hon. Friend feels that that is inaccurate it would be helpful to hear from him. 
 We have also briefly mentioned the criteria for a higher costs course. We have heard that Oxford is thinking of offering physics courses at zero cost. We heard today about the possibility of mathematics courses costing zero. I find it strange that one of the most expensive courses might be charged at a zero rate. That would mean that there would be no relationship between the cost of the physics course and either the fee charged to the student or his future earnings. In the market system, of course, universities will charge what they can get. The idea that the more one pays for a course, the more one increases one's earning power will simply not be borne out in practice.

Chris Grayling: Is the hon. Lady also aware that another complicating factor is that the Government envisage that foundation degrees will also be liable to fee payments? Foundation degrees are intended as entry-level degrees. Under almost any permutation of her amendment or the Government's amendment, it is possible that those students who are jumping over the hurdle into higher education will also build up substantial debts.

Anne Campbell: Indeed. Foundation degrees can lead to quite lucrative employment. Certainly a plumber living in London is probably paid much better than some of those who studied more academic university courses. However, it is difficult to predict that in advance. We do not know whether those courses will be more expensive or cheaper.
 My concern is about access. There are variable fees on the one hand and OFFA, the regulator, on the other. Variable fees will work against access and the regulator will try to reverse that. I shall wind up in a moment, as I know that many hon. Members wish to speak in the debate. I am surprised that the Government have chosen to make this part of the Bill such an important issue. 
 Dropping variability and introducing a higher fixed fee would bring in the additional money for the universities. It would have widespread public support and support in the House. It would instantly transform the Government's fortunes and would attract much additional support for their measures for higher education. It seems a fairly minor point, given that most universities will probably charge the maximum £3,000 fee for most of their courses and that any variability is likely to be small, at least in the first three to five years. I urge my right hon. Friend the Minister to think again about this aspect of the Bill. I look forward to hearing what other hon. Members have to say on the subject.

Tim Collins: We now come to the heart of the Bill. I suspect, as the hon. Member for Cambridge (Mrs. Campbell) has said, that this will be the part of our proceedings on which we have the fullest debate. These are the issues in which hon. Members and those following our proceedings have the greatest interest.
 I salute the hon. Lady for her independence of thinking. She has clearly brought a great deal of personal experience and commitment to the issue. I put that on the record, because I am not able to agree with all her points, but I applaud her courage in addressing these issues from her own point of view and that of her constituents, rather than because of party political pressure. 
 Several of the points that the hon. Lady made are difficult to answer. She mentioned the potential incentive effect—which is frequently quoted by the Secretary of State and others—of a zero rate of variable fee in certain cases such as physics and mathematics. Opposition Members would make the case that if it were an incentive to people to set fees at zero, it follows that it would be a disincentive to set fees at above zero. That is one reason why Opposition Members are against having top-up fees at all. She is right to say that she has identified an issue that must be addressed by the Government Front Bench team: I hope that it will be. 
 The aspect of the hon. Lady's argument that I did not fully share, and which the hon. Member for Bury, North (Mr. Chaytor) set out clearly, was why variability should be deeply sinful in higher education but—it is implied—is somehow acceptable in further education, part-time courses and other areas where it is already a well understood part of the system. A number of Labour Members asked her about that, and I was more convinced by them than by what she said in response. We cannot please all the people all the time. 
 The hon. Lady and other members of the Committee have used language that suggests that the Government are moving towards a market in higher education. That prompts the question: what do we think we have now? Is there already a market? One could argue that the Government's measures make it more of a market, but the current system could hardly be described as having no market-like properties. 
 I was a little worried when the hon. Lady said that she felt that it was wrong to give students an extra element of choice, because it is desirable for students to have choice. The point that she was making was that students should focus on choices that have to do with the courses that they can pursue and in which they are interested, as opposed to choices based on price mechanisms. 
 The hon. Lady is likely to be one of those who would welcome the idea of treating 18-year-olds as independent adults—I shall stand corrected if I am wrong, but I see that she nods. There is an emerging cross-party consensus that it would be desirable, if the practicalities could be overcome, to treat 18-year-olds as adults who are capable of making decisions about such matters. That would be an argument for maximising the number of choices that they are 
 entitled to make at the age of 18, rather than minimising them. I do not therefore agree with her on her central argument—the case against variability.

Anne Campbell: One of the problems is that students from lower-income backgrounds are more averse to building up debt. Although graduates would repay a fairly small amount, I am considering the length of time that graduates would have to repay it. That will be a significant issue for 18-year-olds choosing a university course and trying to distinguish between expensive and cheaper courses.

Tim Collins: I am grateful to the hon. Lady, as these are important matters. I would argue that her case is actually a case against top-up fees. It is not as strong as the case for having no variable fees. If variability is so wicked, why it is acceptable in so many other educational contexts—such as for part-time students in higher education—but somehow leaps a new border to unacceptability when applied to full-time students?

George Mudie: The hon. Gentleman says that we currently have a market and then moves his argument on without halt from market to choice. Can he define the current market in higher education?

Tim Collins: The reason why I think that it is right to refer to the current situation as a market rather than a state-controlled system rests on the principle that universities are independent institutions. The Conservative party, in contrast with the Government, will advance propositions later in the Committee to try to make universities more rather than less independent. However, they are still independent; as the Minister said earlier, they are not owned or controlled by the Secretary of State.
 One reason for debating clause 23 is that the Secretary of State wishes to introduce mechanisms through which he can put in place certain penalties or incentives. He does not have the power to instruct universities because they are not public sector bodies or a nationalised industry. The debate that we sometimes have about whether universities should be privatised ignores the fact that they are not nationalised in the first place. 
 The other element to my argument that the current situation is a market mechanism is that students overwhelmingly have the decision-making power as to which course they study. Therefore, the individual has the choice rather than a state body directing students as to which university they attend and which course they study. As well as that, universities are not nationalised institutions. In those two important respects, we have something that is much closer to a market than to anything else. We can debate whether it is an imperfect market or whether we should change that market nature in some way, but it is difficult to argue that it is not a market and that what would be created as a result of the Government's or the Opposition's proposals would be entirely different and would become a market.

George Mudie: I really am tickled by the hon. Gentleman's definition of a market—it is a new political philosophy. Does he agree that, apart from a small amount of money from industry, these independent institutions receive most of their income from the public purse? I wonder what the relevance of this so-called independence is and how it constitutes a market. I am puzzled as to why the fact that students can choose to attend the university that they want necessarily produces a market. Why would variability of fees be seen as an improvement?

Tim Collins: Rather unusually, I have the sense, from the mutterings coming from the Labour Benches, that I am convincing more of the hon. Gentleman's Labour colleagues than he is. The Minister, from a sedentary position, accurately pointed out that is not true to say that many institutions overwhelmingly or solely depend on the public purse for income—there are many other sources of income. The hon. Member for Nottingham, North (Mr. Allen) made the point earlier that the current situation largely constitutes a market, but perhaps he would like to make his own point in his own way.

Graham Allen: I want to assist my hon. Friend the Member for Leeds, East (Mr. Mudie) for whom I have great respect. We are not talking about a wholly free market, as compared with a system of direct state allocation. What we have is somewhere in the middle: it is a highly imperfect market with awful consequences for his and my constituents. We must clarify the situation so that we can act appropriately.
 One should always ask a Conservative about a market because they probably understand the workings better even than some Labour Members. The hon. Gentleman knows that if there is insufficient income, the outputs must change. Universities UK has criticised him and the policy that he seeks to defend, saying that it would lead to 410,000 fewer students attending university because there would be less income in the system. Many of those students would be from my or my hon. Friend's constituencies. Does he concede that that would be the case in the market that he wants to create or does he think that Universities UK have got it wrong?

Tim Collins: I am grateful for the first part of the hon. Gentleman's intervention, and I shall also address the second part. His first point was absolutely the same as what I was saying. It is what hon. Members from both sides of the Committee would recognise. At present we have, to use his phrase, a highly imperfect market. Although we could debate how further to perfect it, it is still a market rather than something else.
 In answer to the hon. Gentleman's question, it is always interesting when eminent organisations such as Universities UK criticise a policy that is not yet in the public domain. Like him and other hon. Members, Universities UK no doubt eagerly anticipates the moment when my hon. and right hon. Friends announce Conservative policy. In advance of that, however, it is a little difficult to say whether that policy 
 will have one effect or another. However, we are confident that our policy, which we shall publish earlier in this Parliament than the Government published their famous manifesto before the last general election—we shall come to the manifesto pledge later—will give a better deal for universities and raise more money than the policies that the Committee is now debating. The attitude of some universities to that will be interesting.

Graham Allen: I do not know whether the hon. Gentleman is ahead of me or whether I can bring him some news from his Front-Bench colleagues, but my understanding is that his party's leader is committed to abandoning the 50 per cent. target. If that target is abandoned and students from constituencies such as that of my hon. Friend the Member for Leeds, East or mine are not recruited, those youngsters will not go to university even though they are qualified. That is where the figure of 410,000 comes from. However, I should be interested if the hon. Gentleman wants to correct me and tell me where the figure really came from.

Tim Collins: The hon. Gentleman is, indeed, trying to tempt me into setting out policy details, but it is not appropriate to do so now, not least because you might rule me out of order, Mr. Gale. We do not accept the figure that the hon. Gentleman quoted and when our policy emerges, he will see why not. Furthermore, he started by saying that, without top-up fees, there would be a lot less money for universities. We absolutely do not accept that. Indeed, as we shall explain later, the Government's proposals would cost the taxpayer between £1 billion and £1.2 billion to raise, at best, some £900 million for universities. That is a pretty bad deal. Moreover, that calculation assumes zero clawback from the Treasury, which is a heroic assumption, given the history of the Chancellor's substantial clawbacks through lower grant allocations when new sums are made available.

Simon Thomas: I do not share the view of the market that the hon. Gentleman and, it seems, the hon. Member for Nottingham, North unfortunately espouse. The hon. Member for Leeds, East, partly on behalf of the hon. Member for Nottingham, North, gave the example about the need for more input into the market to give more people from different areas the opportunity to go to university. However, does the hon. Member for Westmorland and Lonsdale have anything to say about Universities UK's view on whether the proposals will bring those extra resources or create those opportunities? The way I look at it, Universities UK does not believe that the proposals will have that effect.

Tim Collins: The hon. Gentleman is absolutely right. Universities UK points out that even on the most heroic and generous assumptions about the amount to be raised through the proposals, that money will be a very small proportion of what is needed to close the
 funding gap that it has identified—although, in fairness, the hon. Member for Cambridge touched on that. As the Institute for Fiscal Studies has noted, it is difficult to see how top-up fee proposals will even pay for the Government's 50 per cent. target. It is impossible to see how they can pay both for increasing participation up to 50 per cent. and the already significant funding gaps that Universities UK has identified that universities face even with the present numbers of students.
 The hon. Gentleman is right. The point about the Government's proposals is that they do not solve the problem that they are meant to address. However, there may be something behind the measure, which the hon. Member for Cambridge touched on, which is also relevant to other amendments in the group tabled in my name and that of my hon. Friends, particularly amendment No. 3. I am referring to the issue of whether the £3,000 fee will stay at £3,000 for very long. It is true that we could meet a significant proportion—perhaps even the entire—funding gap addressed by Universities UK if the fee was not £3,000 in cash or real terms, but was set at the level that a number of vice-chancellors have said that they would like to see, which would be about £5,000, £10,000 or £15,000. 
 I understand and accept that the Government have said that that is not their plan, and that they have introduced amendments that supposedly make it very difficult for them to do so before 2010. They have said that they will fight the next election on a pledge not to raise the fees to above £3,000. They have further said that they will make it the case that primary legislation would be needed to break that manifesto pledge. However, the problem is that today we are debating primary legislation to break a manifesto pledge, so I am afraid that that statement does not get us very far. 
Jonathan Shaw rose—

Tim Collins: I am pleased to give way to the hon. Gentleman, who will explain why he is happy to breach the manifesto pledge on which he stood.

Jonathan R Shaw: The hon. Gentleman said that the vice-chancellors would prefer variable fees of between £10,000 and £15,000. Will he tell the Committee which vice-chancellors said that?

Tim Collins: The vice-chancellor of University college, London has mentioned that figure, as has that of Oxford.

Phil Willis: And Imperial college.

Tim Collins: And Imperial college, as the hon. Member for Harrogate and Knaresborough says. There is a whole list if the hon. Member for Chatham and Aylesford wants it. The vice-chancellors are not saying that they want to introduce such fees immediately, but they have said that that level of fee would begin to address the financial difficulties that they face.

Jonathan R Shaw: During the Select Committee inquiry, we heard from several vice-chancellors. None of them referred to £10,000 or £15,000. Sir Richard
 Sykes told the Committee that he was misquoted in the papers, which is something that I am sure no member of this Committee has ever experienced. He said that he did not say that he wanted a fee of £15,000 but that he was referring to charging overseas students £15,000.

Tim Collins: I am well aware that the gentleman concerned has used figures of that size and, indeed, on some occasions, larger figures. [Interruption.] Someone tells me from a sedentary position that he thinks that the figures have been used a dozen times or so. The hon. Member for Harrogate and Knaresborough is familiar with the quotes, as am I. The hon. Member for Chatham and Aylesford points to what was said in the Select Committee, and I am sure that he accurately quotes the report in front of him. However, I am equally sure that we all have plenty of examples to cite.

Phil Willis: Will the hon. Gentleman also say that the position of the vice-chancellor of Imperial college or of Colin Lucas at Oxford is an honourable one? The reality is that if we go down the variable fee route to secure the future funding of our universities, by 2010 fees of that order plus a great deal more will be necessary to deal with the funding situation in our universities. That principle is at the heart of today's debate.

Tim Collins: The hon. Gentleman is right. The position taken by several vice-chancellors is not one that we can criticise on the basis that it is unprincipled or dishonest. They are setting out what is, in their view, the logical consequence of going down the route on which the Government have started. If one believes that the only significant way to get additional resources into higher education is through top-up fees, one cannot honestly believe that a cap of £3,000 can long be sustained. The hon. Gentleman and I disagree about the alternative mechanisms for getting money into higher education, but we agree absolutely that the top-up fee proposal is unacceptable because of the inexorable logic that, perhaps not in the first year or even in the first four or five years, variable fees will before long be at much higher levels.

Alan Johnson: The hon. Gentleman has explained that, 14 months after publication of the White Paper, the Conservative party still has no policy on the matter. As we are discussing fixed fees versus variable fees, can he confirm that the party's policy will never include student fees, either fixed or variable? Can he give that commitment?

Tim Collins: It is interesting that I should be asked to use the word ''never'' by a Minister who frequently said that manifesto pledges apply only for four or five years.

Alan Johnson: I never said that.

Tim Collins: The Minister says that he never said that. I can say absolutely that the Conservative alternative will not involve fees, variable or otherwise, and that we will bring forward proposals that will involve not only the removal of top-up fees if we are
 unsuccessful in blocking the Bill, but the abolition of tuition fees, which were introduced in 1998—incidentally, in violation of another set of pre-election promises. The alternatives will be clear.
 The Minister is on slightly dodgy ground when he says that other parties have had plenty of time to think about their pledges. I remind him that all four political parties represented in Committee stood at the last general election on clear manifesto pledges not to introduce top-up fees. The three Opposition parties are sticking by their promises to the electorate, but the Government are breaking theirs. It is a little rich for the Government to start demanding promises and pledges from their opponents.

David Chaytor: Following the hon. Gentleman's earlier remarks in response to the points raised by my hon. Friend the Member for Cambridge (Mrs. Campbell)—he seemed to have some sympathy for my argument about the discrepancy in her opposition to variability for undergraduates but her support for variability for further education students—will he tell the Committee how the Conservative party justify that discrepancy? Furthermore, can he tell the Committee how the Conservative party justifies opposition to variability in fees for undergraduates but complete support for variable fees in the secondary school sector? He will know that the fees for the forthcoming year at Eton, Harrow and Charterhouse are typically in the order of £20,000 to £22,000 a year. How can that be acceptable—I do not say that it is not—in secondary schools but not in universities?

Tim Collins: I was trying to follow the hon. Gentleman's argument, but mentioning Eton and Harrow did not strengthen his case. They are independent schools and thus outside the state sector. I know that new Labour is incredibly dynamic and prepared to shatter all sorts of shibboleths, but is he saying that if the new Labour party were to be elected for a third term, it would introduce fees in state schools? The Conservative party would strongly oppose that, as would all parents.

Mark Francois: It is just a suspicion, but I wonder whether, in his heart of hearts, the hon. Member for Bury, North would like OFFA to have responsibility for who should go to Eton.

Tim Collins: Perhaps he would.
Several hon. Members rose—

Roger Gale: Order. Even by my generous standards, that was a little wide of the mark.

Tim Collins: Amendment No. 3 would write into the Bill provisions that at the moment rest only in regulations. I record my appreciation, which I suspect is shared by all members of the Committee, of the fact that the Minister has published the regulations in advance. The Government are about to rest a large part of their case—to Labour Back Benchers and to people outside the House—on the fact that they can be trusted, that they will not go above £3,000, and that we
 should not worry about what Richard Sykes has or has not said. However, we believe that the provisions should be included in the Bill.
 For the reasons that I mentioned earlier, we are not in favour of top-up fees, so the amendment is not intended to solidify into law the idea of top-up fees. It merely addresses the fact that the Bill creates that possibility. Given the number of times that the Prime Minister, the Secretary of State and the Minister of State have said that the figure is £3,000, that it will not be above £3,000, that it will be years before it is above £3,000, and that primary legislation will be required before that promise can be broken, we seek to have the figure included in the Bill. It should be included in the Bill, rather than in regulations that must be looked up separately and that require the famous affirmative resolution of the House. We want the legislation to require a future Government to introduce a new higher education Bill, with all the proceedings that that involves—Second Reading, Committee stage, and consideration by both Houses of Parliament—before the figure of £3,000 can be altered. 
 I believe that the Minister is sincere in his wish to reassure people that there is a £3,000 limit and that that will be fixed for a number of years because, although we have disagreements, I do not believe that he gets up every morning wondering how he can dissemble or pretend to be other than he is. I therefore do not see how he could object in principle to the idea of including that figure in the Bill, although I am prepared to listen to any arguments that he or others may advance as to why the amendment may be technically defective in terms of where it is placed. However, given that so much of the debate, both inside and outside the House, has turned on the question of whether the £3,000 figure will remain in place, I cannot see how there can be any objection in principle to including it in the Bill.

George Mudie: I was slightly disappointed with my hon. Friend the Member for Cambridge, who said that she thought that the increase to £3,000 was a measured increase. I well understand the reasons behind the point made by the hon. Gentleman, but does he not feel that there is a case for asking hard questions in Committee about why an increase of up to £3,000 from £1,125 is necessary or reasonable?

Tim Collins: The hon. Gentleman has rightly used the Committee to put that question which, although it was directed through me, should really be answered by the Minister.
 As we have already established, the £3,000 figure is not what many vice-chancellors are considering in the future. It does not plug the gap but, as the hon. Gentleman says, it is nearly triple the figure that is currently in place. There is therefore a danger that it will fail to satisfy anyone. The question that the hon. Gentleman asked is reasonable, and I am sure that the Minister will wish to address it in due course. 
 I shall now discuss amendment No. 110, which is important, because it would address a difficulty in which the Prime Minister found himself. We are a public-spirited Opposition, and, if we can, always like to enable the Prime Minister to escape from difficulties with our assistance and goodwill. 
 Many members of the Committee will recollect that, when the Prime Minister appeared on ''Newsnight'' recently, he found himself put under some pressure by an articulate and persuasive young medical student, who pointed out that the figures that the Prime Minister was quoting at great length on the level of debt, rested on the assumption that all students would be pursuing three-year courses. In fact, some of the courses in higher education that we, as a society, regard as most important, stretch over a longer period. That certainly applies to the courses taken by medical students and veterinary students. The amendment also addresses the case of students pursuing education courses; some of those courses last for three years, but some are longer. The amendment reflects the fact that, as a society, we are not awash with a surplus of doctors or vets or teachers—we need more people in all those categories, and we need to improve their quality as well as their quantity. The amendment would enable it to be made clear in the Bill that top-up fees will not be imposed for those who study for more than three years in any of those socially useful and important professions.

James Clappison: I am particularly grateful to my hon. Friend for mentioning veterinary students. They are of specific interest to me because of the many Royal Veterinary college students in my constituency. Given that those students must pay the fees after graduation, does my hon. Friend agree that the much-vaunted cap of £3,000 has already been broken as far as they are concerned because their debts will be equivalent to far more than £3,000 a year, as they study for five years? [Interruption.] That may create some dissent on the Government Benches but veterinary and medical students do study for more than three years.

Tim Collins: My hon. Friend is quite right. Unless we persuade the Committee to adopt our amendment, those students will pay £3,000 a year, but for more than three years, so the total debt will be greater.

Kali Mountford: Has the hon. Gentleman had any indication that the Department of Health or the Department of Trade and Industry, which often pay fees—certainly in years 5 and 6 for doctors, and throughout study for nurses—intend to cease paying those fees? If not, is not his argument redundant?

Tim Collins: The hon. Lady makes an interesting point. Of course, I do not expect Government Departments to race to support amendments tabled by Her Majesty's loyal Opposition. However, in the cases that she cited, the hon. Lady ignored several points, the first of which is that veterinary surgeons are not covered by any of those provisions, as my hon. Friend the Member for Hertsmere pointed out.
 During the 2001 foot and mouth outbreak, my constituency was one of the most adversely affected in the country. One of the main reasons why the cost of that outbreak was so gigantic—not just to my constituents, but to all taxpayers—was that there was an insufficient supply of veterinary surgeons. There were lots of arguments as to whose responsibility that was and whether the problem predated 1997, but there is no argument that the lack of vets, particularly in northern England, was a significant contributor to the scale of the outbreak and the cost that we all faced. There are no provisions whatever for additional state support for veterinary students. That is a major problem that needs to be addressed; our amendment would do that.

James Clappison: Is my hon. Friend aware that the British Veterinary Association has put it on the veterinary record that these proposals
''may make it more difficult to recruit new graduates into farm animal practice, adding to the shortage of farm animal vets which the House of Commons Environment and Rural Affairs Committee has highlighted as a cause for concern.''?

Tim Collins: My hon. Friend is entirely right. It is extremely disturbing that the number of vets who are prepared to work with farm animals is in sharp decline in many areas. That is likely to get significantly worse in the next few years, almost irrespective of what we do, because many such vets are approaching retirement and there are nothing like the numbers of vets qualifying that there have been in the past or that will be required to replace them on a one-to-one basis. As my hon. Friend rightly said, the royal college has identified this legislation as being likely to be a major factor in making that problem worse.
 The hon. Member for Colne Valley (Kali Mountford) also referred to the steps that have been taken by the Department for Education and Skills and the Department of Health to provide support for some students who are studying for careers in education or medicine. Welcome as those provisions are, they do not cover all students for all courses after the initial three years, and they are not written into primary legislation: they are discretionary grants given by the relevant Secretaries of State. It is desirable that they should be granted but it is not a requirement. Our amendment would make the situation more satisfactory, because it would remove from the minds of 18-year-olds who are contemplating studying those socially important courses and qualifications any doubt as to whether those provisions will be there in the future. They would not need to worry whether their fees beyond three years will be paid, as they would not have to pay any fees after three years.

Simon Thomas: I found the intervention of the hon. Member for Colne Valley interesting as it referred to what would happen to the funding from the Department for Education and Skills and the Department of Health if, under variable fees, the cost of the provision increased year on year. What does the hon. Gentleman believe will be the Treasury's attitude
 to such provision? Will it try to cap the costs and cut the support grants, or will it propose clawback through tuition fees?

Tim Collins: The hon. Gentleman is right. The Treasury, in any Government of any party, will not bind its hands indefinitely on any public spending line. In the circumstances that he described, the Treasury may use the changes as a further way of clawing back some higher education money. That is one reason why we are sceptical about whether top-up fees will raise any significant additional sums for universities.
 The hon. Gentleman is also right to say that in the absence of primary legislation to exempt the students on such courses of more than three years, there can be no guarantee that they will be in as advantageous a financial position in the future as they are now. Apart from in the case of vets, amendment No. 110 would not hugely broaden the extent of support and provision for those who are undertaking longer courses of study, which there is cross-party support for and a clear public interest in. None the less, as it would include the provision in the Bill, we hope that it will be supported by Members from all parties. 
 The amendments tabled by the hon. Member for Nottingham, North address other issues. We have covered variability, longer courses in socially useful and priority occupations and the provision of a cap in the Bill. I am sure that the hon. Gentleman will speak to his amendments, but they are designed to clarify a redistribution mechanism by introducing in the Bill a requirement that at least 10 per cent. of the money raised from fees is paid into a central pot, redistribution of which is at the discretion of the Secretary of State. 
 As the hon. Gentleman might expect, the official Opposition have some concerns about that. I note that several Labour Members support the amendments, so it will be interesting to hear what the Minister has to say. Our view is that it is desirable for higher education institutions that are successful in attracting students to have the money following the student rather than being redistributed. However, all that depends on what people think of top-up fees. The Conservatives do not want top-up fees, and if we did not have them, we would not have to worry about how to distribute the income that is generated. 
 The amendments of the hon. Member for Nottingham, North would set the precedent of moving away in legislation from the idea that higher education institutions should make provision to attract students of high ability but from a low-income background through their own doors. As the hon. Member for Cambridge has rightly pointed out, Cambridge university, like other Russell group universities and other institutions, has an excellent record in this area. However, the amendments would move us to a system in which higher education institutions were responsible not just for recruiting low-income students through their own doors, but for providing support for recruiting low-income students through the doors of other institutions. 
 There is a strong imperative for a mechanism by which the state takes an interest in ensuring that people from low-income backgrounds can get into higher education institutions, but we are concerned about whether it is appropriate for that to be contracted out to the universities. It should be legitimately addressed through the grant and other mechanisms that are put in place by the Government. It will be interesting to hear the Minister's response to the amendments tabled by the hon. Member for Nottingham, North, because the 10 per cent. figure is inherent, at least in part, in some of the Government's thinking, but they have not included it in the Bill, as he suggests. 
 The Conservative party's position is that we should do without top-up fees, but we can have an interesting debate—I look forward to hon. Members' comments—about whether the redistribution mechanism should be in the Bill and whether it should be the implied or, indeed, explicit responsibility of universities rather than the Department. I do not disagree with the hon. Gentleman that there is a general public interest in ensuring that people from low-income families have access to higher education, but I wonder whether his proposals are the right way to bring that about.

Phil Willis: I am particularly interested in the hon. Gentleman's final comments, which take him into a new area of Conservative policy. He confirmed to the Minister, as the hon. Member for South Suffolk (Mr. Yeo) did to my hon. Friend the Member for Southwark, North and Bermondsey (Simon Hughes) on the Floor of the House, that the Conservative party would not introduce top-up fees. Can the Committee take that to mean that it will introduce grants for all students?

Tim Collins: The hon. Gentleman will have to wait and see. I am thrilled—that is the only way I can describe it—at the deep interest in Conservative policy in many quarters of the Committee. If one studied recent opinion polls, one would assume that our policies were more likely to be implemented after the next election than those of any other party, so it is quite right that there should be a level of interest in them. None the less, I would urge some patience. The hon. Gentleman will see our proposals when we publish them, and I am sure that he will study them with interest. He may even feel a comment issuing from his lips, which may find its way to some journalists, and we wait with baited breath to see whether it will be positive.

Kali Mountford: Will the hon. Gentleman clarify what part Dearing now plays in his party's thinking, given that it was the mechanism that all parties agreed to adopt in tackling the future of higher education? What part of Dearing does he now want to abandon? Does it play any part in his thinking?

Tim Collins: I have to say to the hon. Lady that, in 1997, the incoming Labour Government did not legislate to implement the entire Dearing report; indeed, it departed quite significantly from its recommendations. It is a bit rich of the hon. Lady to go back to 1997 given that, as she will recall, the present Prime Minister ruled out introducing tuition fees before the election only for the Government promptly to legislate to introduce them afterwards. If I may say so, there is a bit of a pattern emerging. The Labour party says one thing before elections and does the complete opposite after them. It will be interesting to see what it promises in its manifesto at the next election, because we will then know with absolute certainty that it will do the exact opposite.
 I now wish to conclude my remarks, however, by saying that this is a very important part of the Bill. We look forward to what the Minister has to say about variability, although I suspect that I shall have some sympathy with his comments. We also look forward to him telling us why the figure of £3,000 should not be included in the Bill and why we should rely on a mechanism other than primary legislation to promote access for veterinary, medical and education students, who might be deterred by the fear of paying fees for more than three years.

Graham Allen: I want to speak to the amendments in my name and to put in perspective why I tabled them and why they are important.
 First, no one should run away with the idea that university finance is the most important thing for working-class kids' life chances. Many of the most important factors for my constituents are a lot further down the educational food chain, and we must go back to further education, secondary schools and primary schools. Indeed, we must go right back to an issue that I was lucky enough to raise with the Prime Minister last week—the social behaviour that enables toddlers to make the best of their early years in education. We need to debate that important issue carefully. Let us not run away with the idea that somehow working-class kids are cheated out of their life chances at 18. The dice are loaded against them much earlier. The Committee must try to ensure that life chances are improved for all kids, for all the constituents whom we represent. 
 I speak with great feeling on the issue. People are probably fed up of hearing this, but I will say it again: my constituency sends fewer young people to university than any other constituency in the United Kingdom. It is not Tower Hamlets, Glasgow or Manchester, Moss Side; it is Nottingham, North. To discover the reason for that, one need only visit the constituency and see the large tracts of former council housing, where educational attainment is under-valued and there is a strong culture that young people have to fight if they are to go on even to A-level or further education, let alone university. 
 In seven out of the eight secondary schools in my constituency, education ends at 16. There is one sixth form college, in the middle of my constituency, and a handful of kids from the constituency attend it. The culture is that people leave school at 16. A young 
 person is not unusual if they stay on; they are weird. I have had this conversation with my right hon. Friend the Minister. The feeling is that there is something peculiar about someone who decides to stay on at school and seeks to better themselves by going into FE or to university. The system fails those kids. 
 I want to say more later about the children who go to university now. This generation will be looked back on as the group who got the worst possible deal from our education system. People like me, who were lucky enough to go to college and then university with a full grant, and the youngsters who will go to university with a full grant if the Bill is passed will look back on this brief interregnum as a dark age of higher education.

Eleanor Laing: The hon. Gentleman is right to say that the early years of a child's education are the most formative and therefore the most important. Why, then, does he insist on such a high target—50 per cent.—for the number of 18-year-olds going to university, when the resources used for that 50 per cent. could be much better deployed in giving chances to children at the ages of four, five, six, seven and eight? That would really affect their life chances.

Graham Allen: I do not know whether it would be gentlemanly to strike the jutting-out chin of the hon. Lady—perhaps I will move on.
 Although I finally got back on the education ladder after one or two hiccups, there was nothing special about me. Indeed, many of my colleagues at school were far brighter than me, but never went on to any form of further or higher education. Kids in my constituency, where I was fortunate to be born and bred, are not stupid. They are no less capable of educational achievement than anyone else. However, we need to put in all the layers of possibilities so that we can open up educational opportunities for those youngsters. 
 Unfortunately, the policies of those on the Conservative Front Bench—I am sure that the hon. Lady will wish to dissociate herself from those policies when she has heard my remarks—would restrict the opportunities of youngsters in my constituency to better themselves. Frankly, if the phrase ''equal opportunities'' means anything in Conservative philosophy, it must mean allowing capable working-class kids every opportunity to get to university. That is not only denied them currently, but, according to Universities UK, 410,000 fewer youngsters would go to university if the targets set by Conservative policy were reached. That is yet to be refuted. Will the hon. Lady say whether those youngsters would be from leafy suburban constituencies, or would they be the kids from working class constituencies who do not go to university and who will be denied further opportunity under the Conservative proposals? I look forward to her explanation.

Chris Grayling: First, Universities UK is simply wrong about the figure of 410,000. Secondly, the hon. Gentleman described a profoundly serious situation in his constituency that no Member on either side of the
 House would ignore: that it is considered weird to stay in education beyond the age of 16. However, that reveals a profound social problem that lies far beyond the education system and that cannot be blamed simply on the system. However, he is making a jump from the situation that he describes when he talks about the university admissions system being part of the solution. The solution lies in society in earlier years. Surely he accepts that? His argument is totally at odds with reality.

Graham Allen: I am grateful to the hon. Gentleman for repeating my opening remarks about the need to look far beyond university admissions if we are to tackle this problem. Again, I urge my colleagues not to think of this as being merely a Labour issue. We need to sympathise with young working class kids in constituencies represented by other parties, including that of the hon. Member for Epping Forest (Mrs. Laing). It may surprise her to know that 30 per cent. of her constituents will be able to qualify for the full grant under the Government's proposals. I have the figures in front of me. That means that more than 30 per cent. of families in her constituency of Epping Forest will qualify if the youngsters are good enough and can obtain the necessary qualifications. Almost 68 per cent. of families in her constituency would qualify for a partial grant. Real things will happen in her constituency, too. This proposal is not only about helping kids in Leeds, East, in Nottingham, North or in any other Labour constituency.

Eleanor Laing: I am not at all surprised at the statistic that the hon. Gentleman kindly provided for my constituency. The idea that children in constituencies represented by Labour Members are different from children in constituencies represented by Conservative Members is absolute nonsense. I am not surprised by the figure of 30 per cent. I desperately want more 16-year-olds in parts of my constituency to go on to further or higher education. Far from refuting the point that I made to him earlier, the hon. Gentleman has enforced my argument. If a certain amount of money is to be spent on education, it is nonsense to say that most of it should be spent on very large numbers of young people. Why should the figure be 50 per cent. and not 45 per cent. or 55 per cent.? The figure is arbitrary. Why should the money be spent on 18 to 21-year-olds when we all know, as the hon. Gentleman said most eloquently, that it is the early years of a child's education that give him or her different chances in life? I want there to be more investment in early years education in my constituency and throughout the country.

Graham Allen: I am sure that the hon. Lady is trying to support my remarks, and I thank her for her assistance. I am also sure that she joined the Labour lobby in voting for Sure Start and many other schemes.

Eleanor Laing: I supported Sure Start.

Jonathan R Shaw: The Committee heard the hon. Lady say that she supported Sure Start. I thank her on behalf of my constituents and the Sure Start scheme in Chatham, but why did she not vote for the money?

Roger Gale: Order. We have enough problems dealing with higher education without embarking on discussions about other issues.

Graham Allen: I give way to my hon. Friend the Member for Aberavon (Dr. Francis).

Hywel Francis: On that very point, which is dealt with in a report on adult learning entitled ''The Learning Divide'', does my hon. Friend agree with me and with Professor Theresa Rees, a very distinguished academic who, as I have pointed out in an earlier debate, has been asked to examine the impact of these proposals on Wales, that, as was reported in The Times Higher Educational Supplement last week, the most contentious issue is variable fees? However, the whole question of debt aversion is linked very much more to maintenance. The distinguished academic and medical practitioner, Dr Julian Tudor Hart, describes the situation in health as the inverse care ratio—the poorest people always have greatest difficulty accessing health care. The same applies in education—the inverse learning ratio. For example, a group not touched, in which I have a particular interest, is that of carers—in his area 9.79 per cent. of the population are carers. How many of those will enter higher education?

Roger Gale: Order. I must ask hon. Members to keep interventions short. Every hon. Member will have the opportunity to catch the eye of either Mr. Hood or myself in the course of this debate. That is the time to make speeches, not during interventions.

Graham Allen: My hon. Friend the Member for Aberavon speaks with great passion about the situation in his constituency, and refers to another constituency. I could not sit down without reminding the Committee of the statistics for the number of families in his constituency that will qualify for a full grant—a £3,000 grant. It will be 58 per cent of families—I have the statistics for other constituencies too. More than that—the figures are certainly repeated for the constituencies of my hon. Friends and sprinkled about for the constituencies of Opposition Members—91 per cent in his constituency will get some form of grant. Only 9 per cent will get nothing from the package put forward by the Government. That is another perspective on my amendments. It is important to understand what is on offer here, and what we can do for our constituents.

Phil Willis: Perhaps we could get a grant for some heating this afternoon.
 I hope that we do not run the equivalent of a class war during this debate. It is not about one group of students. The hon. Gentleman will agree that a significant number of students, particularly over the last two decades, are going to university not from wealthy families but from families on marginal incomes. They will not receive significant grant aid under the Bill. We must not roll back the clock and penalise the very people, who through their own endeavours, have fought to get their sons and daughters into university.

Graham Allen: I am afraid that I cannot respond to the offer to be gentlemanly about this. The fact that 20 per cent. of working-class kids have gone to university over the last 40 years is not a reason for me to be nice and polite about the situation. It is intolerable; it is unacceptable. Vice-chancellors should do something about it, the Government should do something about it and Opposition parties that do not join in doing something about it should be as ashamed of the record as I am.
 My party has been in government for much of that period, and some kids suffer. We can call them working class or define them however we want; let us use a nice polite term about socio-economic standards or lower-income families or, as we are now being told, the kids from non-traditional families who do not go to university. We know what we are all talking about here, and that there has been an incredible waste of talent of my constituents and of everybody else's constituents. This is why we are here and why Parliament takes this issue seriously. We are frittering away—the polite expression, which we do not normally use in Nottingham, North—a lot of talent. Our country can ill afford to do so. If a student is good enough, regardless of their socio-economic background, they should be able to go to university. 
 It is important that students should get the assistance for which 65 per cent. of families in my constituency would qualify if their kids were good enough to go to university. Their youngsters would need the £3,000, and debates about how much variability we can get on the head of a pin pass them by. Hon. Members in the Committee, the Chamber and the Opposition parties are talking down their chances by frightening students about their debt liability, which is income contingent, and which they can pay off when they are earning sufficient money. I reject the offer of the hon. Member for Harrogate and Knaresborough not to talk about the class base of education because it exists and we have a duty to do something about it.

Simon Thomas: I want to take the hon. Gentleman back to his exchange with the hon. Member for Aberavon. The Committee should not be misled by the figures, which are not applicable to Wales. If the Bill is enacted, it will be for the National Assembly for Wales to decide what the grant will be, whether there will be tuition fees and what the level of variability will be. Therefore, the hon. Member for Nottingham, North is wrong to give figures for the number of people in Welsh constituencies who will be eligible for the grant because that will not be decided until 2006.

Graham Allen: I take the hon. Gentleman's point that it is a devolved matter; I supported his earlier remarks about devolution, as he knows. Unlike the hon. Member for Westmorland and Lonsdale, we do not believe that the centre should instruct people on what to do about some of these issues. The Bill will allow greater freedom for universities to take the decisions. However, were the Welsh Assembly to take a decision similar to that proposed by Her Majesty's Government in Westminster, 50 per cent. of the
 constituents of the hon. Member for Ceredigion (Mr. Thomas) would be from families who would qualify for a full £3,000 grant and almost 88 per cent. of them would qualify for a partial grant. Only 12 per cent. would not get any benefit. Of course, not everyone can have the full benefit; there is a taper and we need to deal with the problem of people who are just above the income thresholds. As my hon. Friend the Member for Cambridge said, there is a difficulty if people come from areas where house prices are very high.
 Many of these issues were addressed with the involvement of hon. Members before the Bill came into Committee. The fact that we managed to make the changes suggested shows the constructive way in which measures have been developed. Whether they are called rebels or loyalists, parliamentarians have had quite an impact on Government thinking, as the Minister will be the first to concede. I hope that he will also concede that there are several other areas in which hon. Members of all parties, whether they are designated as mainstream, rebels or anything else, can make helpful interventions to move the Bill forward.

George Mudie: I am listening with great sympathy and interest to my hon. Friend. My question is not hostile; I just want to tease out for future reference what he defines as working class. Does my hon. Friend agree that we would regard an individual such as an engineer—not a civil engineer but a maintenance fitter in a Nottingham factory as I was in my early days—or a returnee nurse as working class? However, if such people are earning the normal income for that occupation, their children would not get a grant, and they would get no help whatever with fees. Does my hon. Friend see the problem of persuading such families to encourage their children to go to university?

Graham Allen: My hon. Friend always was a tease. I am happy to be teased out on this occasion. First, let me remind him of the statistics for his constituency: 55 per cent. of his constituents will get a full £3,000 grant if the package goes through. If it is wrecked, 55 per cent. of his constituents will not get a £3,000 grant to go to university, or even have that possibility.

George Mudie: Will my hon. Friend give way?

Graham Allen: Let me just answer the question that he put to me teasingly earlier. In addition, fewer than 11 per cent. of his constituents would get a partial grant. He makes a serious point about those who are on incomes just above the key thresholds. My rough definition of working class in this instance is those who qualify for a full grant, which is those whose family income is £15,900 or less. That is a small sum of money. It is below the national average, but it is a working definition. I hope that he accepts that I put it forward in all good faith.
 Can hon. Members imagine themselves having a joint family of £15,900 or less and what their socio-economic situation would be? Let us not use the phrase ''working class''. Youngsters who struggle out of that environment and claw their way up the educational 
 ladder to get the appropriate qualifications deserve the full grant. I am sure that my hon. Friend would agree and will support the proposal when it comes back.

George Mudie: I take issue with the word ''wrecked''. I appreciate that my hon. Friend has taken the trouble to table some thoughtful amendments. The implication is that if we approve the lead amendment, against the Government's wishes, we will have somehow wrecked the Bill. I am sure that he will agree that a Committee is a place where we persuade Ministers to make changes to the Bill. If we manage to do that, I do not see how it would wreck the Bill.
 I must push my hon. Friend on his definition of working class, which is a family income of £15,000 of less. The average family income is £28,000. If two individuals in a family were working full time and receiving the minimum wage, they would bring home £20,000. We should be a bit broader and look not only at people earning less than £15,000. That is a problem, but there is a greater problem with people who have done what we would wish to see; they have worked hard, bettered themselves and want to better their children's future.

Graham Allen: I have great respect and admiration for my hon. Friend. I have worked closely with him over many years and I hope to continue to do so. I respect the position he takes and where he is coming from. I am not being derogatory when I talk about wrecking. It is not in my power either to drop the Bill, to accept parts of it or to make compromises. It has been made clear that should key parts of the Bill fall, it may fall as a whole.
 I do not suggest that the amendment is designed to wreck the Bill, but I make a plea to him on behalf of my constituents. I am not in the Government. I am about as likely as he is to be in the Government in the next few years. It is not a case of putting the line. Almost two thirds of families in my constituency will qualify for a full grant if the Bill goes through. No Labour Member could have dared to hope that we would be anywhere near that prize until now. 
 My hon. Friend asked how thresholds are calculated. That is an important question, but the current threshold is easy to calculate: there is no grant, so nobody gets anything, regardless of where they are. In future, when the thresholds are in the Bill—I should like to see them there—it will be easy for people to calculate the income levels.

James Clappison: Will the hon. Gentleman give way?

Graham Allen: I will give way in a moment. If the hon. Gentleman can contain himself, he will have his chance.
 As I said to my hon. Friend the Member for Cambridge, we must examine the thresholds and tackle the important issue raised by my hon. Friend the Member for Leeds, East. I shall move an amendment later to enable more money to be sucked in to the front end to do something about thresholds. If something could be done about the important question raised by 
 my hon. Friend the Member for Cambridge about regional differences in house prices, that too would be important for a number of colleagues. I hope that my right hon. Friend the Minister will take those comments as I mean them, which is sincerely: there are still ways in which we can improve the Bill. I assume that the hon. Member for Hertsmere wants to find out about statistics for his constituency.

James Clappison: The hon. Gentleman is making an extremely important point about the costs of living and thresholds. On thresholds and combined grants, which were announced by the Secretary of State as enabling students to meet the higher costs of variable fees, he referred to the figure of £15,970. Between £15,970 and £21,000, students currently pay no fees at all. Under the proposals, for the first time, they will have to pay an element towards the cost of their education. Even though they receive a grant, it will taper out and not cover the full cost. At the moment, it is free under £21,000; under the Secretary of State's announcements, they will pay something.

Graham Allen: Indeed, they will pay something, and it calculates at around £4 a week for a graduate who has undergone a three-year course. I do not blame the hon. Gentleman for being embarrassed about his party's policy, but what he does not mention is that almost a third of his constituency of Hertsmere—the very word makes one think of leafy suburbs—

Phil Willis: The hon. Gentleman did not mention Harrogate.

Graham Allen: Harrogate is on the way. Just under one third of families in the constituency of the hon. Member for Hertsmere will be eligible for the full grant. One can imagine the abundant joy in the streets of Hertsmere when the lower-income areas rejoice at the assistance that they will get. If he joins us in our Lobby, I am sure that he will be the first to put out a leaflet supporting a £3,000 grant for youngsters on the estates—I mean the council estates, not the shooting estates.

Alan Johnson: My hon. Friend is making a good argument, but I should like to return to the question of youngsters with a household income between £15,970 and £21,000. Does he recall the arguments made by Opposition Members, and by some on the Government Benches, that as we have moved the onus for payment from the up-front fees for students as they go to university fees to the graduate, that it does not make sense that fee repayment should depend on family income before applying to university? It is for that reason that the fee remission, mentioned by the hon. Member for Hertsmere, is paid up front as a grant, rather than being taken off the fee. Does my hon. Friend not agree that that is a much fairer system, which addresses precisely the hon. Gentleman's point?

Graham Allen: I do not think that the hon. Member for Hertsmere wanted his point addressed; none the less, the Minister has done so more eloquently than I could.
 However, rich students with rich parents, and poor students with poor parents, will not repay fees. Qualified graduates earning £15,000 will pay the princely sum of £4 a week.

James Clappison: Will the hon. Gentleman give way?

Graham Allen: I am being glowered at by colleagues on the Treasury Bench, so I had better make progress.
 As part of that perspective, I suggest that youngsters in constituencies like mine need an incentive to go to university. We have front-loaded assistance by ensuring that a grant is available, and we have abolished the up-front fee. I do not swallow the argument that an income-contingent fee paid only by those earning more than £15,000 a year is a disincentive. The danger is that—sometimes for party political purposes but sometimes because of genuine anxiety—we play up the question of debt aversion rather than explain people's income-contingent liabilities and repayments. 
 After Second Reading, the first thing I did was to write to head teachers in my constituency to ensure that, whichever newspaper they read, they could tell the kids who aspire to go to university that they should not be frightened about fees because they would not have to repay them until they were earning as graduates. The other goods news for people in Nottingham, North—and everywhere else—is that the children will receive an up-front grant if their family income entitles them to one.

Jonathan R Shaw: On the subject of debt, is it not the case that of all socio-economic groups, working-class people have the worst debt? They suffer from store-card debt and from the activities of loan sharks. It is important that university loans are explained, because people in such circumstances often associate debt with the huge annual percentage rate of store-card and loan sharks debts.

Graham Allen: If kids are bright enough to battle their way through an education-averse culture, to crawl their way up the educational ladder despite pressure from their peer group and to get the necessary qualifications for A-level and university, they are almost by definition streetwise and bright enough to know a damned good interest-free loan when they see one. That is especially so when compared to what mum is borrowing to keep body and soul together and to keep the furniture. Such kids will realise that it is an extremely good deal.
 I shall move on to the second perspective and the helpful exchange that we had about markets. I give credit to the hon. Member for Westmorland and Lonsdale for clarifying some of the issues, but he did not go quite far enough. My hon. Friend the Member for Leeds, East asked whether higher education is a market now. We must understand that markets are sophisticated and can go from one extreme to the other. At one end there is the Stalinist centralised planning system, and even then, that did not squeeze out the market because it involved a cost. At the other 
 extreme is the Chilean Pinochet ''let it all rip and do not intervene'' system. 
 Thankfully, our debate is at the centre of that spectrum. Unfortunately, the current market in higher education denies qualified youngsters the university of their choice. It forces the lower middle incomes to which my hon. Friend the Member for Leeds, East referred to pay a joining-up fee before they can go to university. It is a market that gives no grant for any student to live on, and it kills the aspirations of a generation of kids who want to better themselves. It is a market that lets universities off, which perpetuates the scandal. It is a rigged market, and it is in need of reform not protection. 
 One of my key arguments is that we need to make the existing market in university fees more transparent; it should be properly regulated. That is the Labour tradition. In the words of John Smith, ''A market is a good servant, but it can be a bad master.'' Whatever the differences may be, we need to create a properly ordered, transparent and regulated market. I hope that those social goals will be evident in our debates today. 
It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.

The following also attended, pursuant to Standing Order No. 118(2):Mackinlay, Andrew (Thurrock) (Lab)